SWOT analysis is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. SWOT analysis should be done before setting the objective as this would allow achievable goals or objectives to be set for the organization.
SWOT analysis is useful to both Inditex executives and Zara store manages as they have to set their own objectives and make decision respectively. In the case study, Zara has only hold a small portion of market share in USA garment industry with only 50 branches. Before fully development in USA market, SWOT analysis enables Inditex executives to understand their Strengths, Weaknesses, Opportunities, and Threats of Inditex. For example, the strength of Zara is “fast-fashion”, with fast design and manufacturing process, while the threat is there are too many fashion stores in USA already similar to Zara, facing keen competition in USA garment market. Inditex executives should considerate all these internal and external factors before fully enter into USA market.
Zara stores managers only focus on their own store but not the whole business group. However, SWOT analysis also helps them in setting objective. Before Zara stores managers setting the monthly sales target, SWOT analysis helps them to find out what are the Strengths, Weaknesses, Opportunities, and Threats of the store. For example, the weakness of a new shop maybe poor customer services with inexperienced managers and staff, causing lower sales income. If the Zara store is located in the shopping mall with no high-fashion store similar as Zara, that maybe the opportunities for that Zara store because less competition involved. Zara stores...
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